Asian Chip Stocks Fall as AI Financing Worries Around Big Tech Intensify

Deep News10-30

A lackluster earnings season that will determine the outlook for the AI trade has sent global chipmaker shares sliding, with investors growing increasingly concerned about soaring costs and the sustainability of demand.

The latest triggers include Amazon's massive capital expenditure figures and Intel's weaker-than-expected sales forecast due to soft demand for personal computer processors. This has further fueled investor worries about the high financing costs of the AI boom and whether these massive investments will generate returns.

The Bloomberg Asian Chipmakers Index fell 1.8% on Friday. Among the biggest decliners, SK Hynix of South Korea and Advantest of Japan each dropped more than 6%. South Korea's Kospi index at one point fell 4.3%.

"This earnings season has been tough for AI companies, with most hit by a double whammy of AI bubble and inflation concerns," said Anna Wu, founder of Floodlines Research and an investment strategist. "Higher financing costs and credit risks could ultimately force hyperscale data center operators to slow the pace of expansion."

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